BILL NUMBER: AB 809	CHAPTERED  06/08/00

	CHAPTER   31
	FILED WITH SECRETARY OF STATE   JUNE 8, 2000
	APPROVED BY GOVERNOR   JUNE 8, 2000
	PASSED THE ASSEMBLY   MAY 30, 2000
	PASSED THE SENATE   MAY 25, 2000
	AMENDED IN SENATE   MAY 23, 2000
	AMENDED IN SENATE   MARCH 9, 2000
	AMENDED IN SENATE   FEBRUARY 29, 2000
	AMENDED IN SENATE   FEBRUARY 24, 2000
	AMENDED IN SENATE   JANUARY 31, 2000
	AMENDED IN SENATE   JANUARY 19, 2000
	AMENDED IN ASSEMBLY   MAY 28, 1999

INTRODUCED BY   Assembly Members Lowenthal and Villaraigosa
   (Principal coauthors:  Assembly Members McClintock and
Strom-Martin)
   (Principal coauthors:  Senators Dunn, Johannessen, and Karnette)
   (Coauthors:  Assembly Members Baldwin, Bates, Correa, Davis,
Dutra, Firebaugh, Florez, Havice, House, Leach, Longville, Maldonado,
Margett, Nakano, Olberg,  Oller, Pescetti, Reyes, Scott, Strickland,
Torlakson, and Zettel)
   (Coauthors:  Senators Costa, Kelley, Monteith, Morrow, Murray,
Polanco, Poochigian, Rainey, and Speier)

                        FEBRUARY 24, 1999

   An act to add Section 17139.5 to the Revenue and Taxation Code,
and to add Sections 1673, 1673.2, 1673.4, 1673.5, 1673.6, and 1673.7
to the Vehicle Code, relating to vehicles, making an appropriation
therefor, and declaring the urgency thereof, to take effect
immediately.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 809, Lowenthal.  Vehicles:  smog impact fee:  refunds.
   (1) Existing law imposes a smog impact fee of $300 on a person
making application to register a motor vehicle in this state that was
previously registered outside this state, with certain exceptions.
However, in the case of Jordan v. D.M.V. (1999) 75 Cal.App.4th 449,
the court ruled that the imposition of this fee is unconstitutional.

   This bill would require the Department of Motor Vehicles to search
its records to identify all persons who paid the smog impact fee on
or after October 1, 1990, and, using funds appropriated to the
department for this purpose, to provide a payment to each person
identified, consisting of the amount of smog impact fee, any penalty
paid to the department for late payment of the fee, and interest on
the total amount.  The bill would require the interest to be
calculated as specified.
   The bill would exclude any interest payment received under these
provisions from "gross income" for purposes of the Personal Income
Tax Law.
   The bill would appropriate $10,984,000 from the General Fund to
the department to carry out its provisions.
   The bill would make it a crime for any person to knowingly make a
false statement or commit other specified acts in connection with a
claim for refund of the smog impact fee, thereby imposing a
state-mandated local program.
  (2) The California Constitution requires the state to reimburse
local agencies and school districts for certain costs mandated by the
state.  Statutory provisions establish procedures for making that
reimbursement.
   This bill would provide that no reimbursement is required by this
act for a specified reason.
   (3) This bill would become operative only if SB 215 of the
1999-2000 Regular Session is enacted and becomes operative.
   (4) This bill would declare that it is to take effect immediately
as an urgency statute.
   Appropriation:  yes.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  The Legislature finds and declares all of the
following:
   (a) Chapter 3.3 (commencing with Section 6261) of Part 1 of
Division 2 of the Revenue and Taxation Code imposes a three hundred
dollar ($300) smog impact fee on used motor vehicles that were last
registered outside of this state and are not certified to meet the
state's vehicle emission control requirements.  The fee is due upon
the initial registration of the vehicle in this state.
   (b) The smog impact fee has been collected by the Department of
Motor Vehicles on behalf of the state since October 1990, during
which time approximately 1,700,000 vehicle owners have paid the fee,
resulting in a total amount of approximately five hundred million
dollars ($500,000,000).
   (c) Lawsuits challenging the imposition of the smog impact fee
were the subject in the case of Jordan v. Department of Motor
Vehicles (1999) 75 Cal.App.4th 449, in which the court ruled that
imposition of the smog impact fee is unconstitutional and ordered the
state to refund the fees to the plaintiffs.
   (d) The Governor, in November 1999, announced that the state would
not appeal the decision of the court in the case cited under
subdivision (c) and that the state would refund the smog impact fee,
plus interest, to all persons who have paid the fee.  The Governor
also instructed the Department of Motor Vehicles to stop collecting
the fee and made provision in the proposed 2000-01 Budget Act for
legislation appropriating funds to pay the smog impact fee refunds
with interest.
   (e) The Legislature, through enactment of this act and its
companion measure, Senate Bill 215, intends to do all of the
following:
   (1) Repeal existing provisions of law that establish and impose
the smog impact fee.
   (2) Require the Department of Motor Vehicles to search its records
and promptly identify those persons who were, at the time the
application for registration was completed, the registered owner or
lessee of the vehicle and who are eligible for a refund of the smog
impact fee.
   (3) Notify all eligible recipients of the pending refunds and
provide a simplified verification and claims procedure for those
refunds.
   (4) Promptly provide payment of the smog impact fee refunds to
eligible persons, including the three hundred dollar ($300) fee, any
penalty fee collected for late payment of the smog impact fee, and
any interest earned on those charges.
   (5) Appropriate the full amount of funds necessary to refund the
smog impact fee, any penalty fee collected for late payment of the
smog impact fee, and any interest due to those who paid the fee.
  SEC. 2.  Section 17139.5 is added to the Revenue and Taxation Code,
to read:
   17139.5.  For taxpayers who were not allowed to deduct the vehicle
smog impact fee imposed by Section 6262 when paid or incurred, any
interest paid by this state in conjunction with the refund of the
smog impact fee shall be excluded from gross income.
  SEC. 3.  Section 1673 is added to the Vehicle Code, to read:
   1673.  For the purposes of refunding the smog impact fee, as
prescribed in Sections 1673.2 and 1673.4, "registered owner or lessee"
means the person or persons to whom the registration or title was
issued when the transaction that included the imposition of the smog
impact fee under Chapter 3.3 (commencing with Section 6261) of Part 1
of Division 2 of the Revenue and Taxation Code was completed.
  SEC. 4.  Section 1673.2 is added to the Vehicle Code, to read:
   1673.2.  (a) The department, in coordination with the Department
of Finance, shall do all of the following:
   (1) Search its records to identify the registered owner or lessee.
  Except as required under Section 1673.4, the department shall mail
to the registered owner or lessee a refund notification form
notifying the registered owner or lessee that he or she is eligible
for a refund of the smog impact fee.  This form shall identify the
vehicle make and year, and include a refund claim that shall be
signed, under penalty of perjury, and returned to the department.
   (2) Shall acknowledge by mail claims for refund from registered
owners or lessees received prior to the effective date of this
section.
   (3) Except as provided in Section 1673.4, shall verify whether the
information provided in any claim is true and correct and shall
refund the three hundred dollar ($300) smog impact fee, plus the
amount of any penalty collected for late payment of the smog impact
fee, and any interest earned on those charges, to the person shown to
be the registered owner or lessee.
   (b) Notwithstanding Section 926.19 of the Government Code,
interest shall be paid on all claims at a single annual rate,
calculated by the Department of Finance, that averages the annualized
interest rates earned by the Pooled Money Investment Account for the
period beginning October 1990 and ending on the effective date of
this section.  Interest on each refund shall be calculated from the
date the smog impact fee and vehicle registration transaction was
completed to the date the refund is issued.  Accrual of interest
shall terminate one year after the effective date of this section.
   (c) (1) Notwithstanding any other provision of law, those who paid
the smog impact fee between October 15, 1990, and October 19, 1999,
may file a claim for refund.
   (2) Claims for refund by a registered owner or lessee shall be
filed with the Department of Motor Vehicles within three years of the
effective date of this section.
  SEC. 5.  Section 1673.4 is added to the Vehicle Code, to read:
   1673.4.  (a) Any claim submitted by a person other than a
registered owner or lessee shall be filed within 30 days from the
effective date of this section.
   (b) If a claimant other than the registered owner or lessee files
a claim, or has filed a claim prior to the effective date of this
section, for refund in a manner and form verified by the department,
the department shall mail a notification to the registered owner or
lessee informing that person that he or she is eligible for a refund
of the smog impact fee and that a competing claim for that fee has
been filed.  The registered owner or lessee shall have three years
from the effective date of this section to inform the department that
the registered owner or lessee opposes payment of the smog impact
fee refund to the competing claimant.  In that case, the refund shall
be made to the registered owner or lessee and notice of that action
shall be sent to the competing claimant.  If the registered owner or
lessee does not notify the department within the three-year period
that he or she opposes the payment, the department shall pay the
refund to the competing claimant.
   (c) If any refund paid by the department under this section is
disputed, any party that filed a claim may commence an action in
small claims court.  The small claims court action may not be filed
if three years or more have elapsed from the date the department
mailed the refund to either party.
   (d) The State of California, its departments and agencies, and
their officers or employees shall not be a party to a lawsuit between
competing claimants relating to smog impact fee refunds.
  SEC. 6.  Section 1673.5 is added to the Vehicle Code, to read:
   1673.5.  The department shall attempt to recover any refund of the
smog impact fee, or part thereof, that is erroneously made.
Collection shall be initiated if the recipient fails to respond to
the Department of Motor Vehicles' notice to pay the erroneous refund
within 90 days in accordance with existing collection procedures
utilized by the department.
  SEC. 7.  Section 1673.6 is added to the Vehicle Code, to read:
   1673.6.  It is unlawful to use a false or fictitious name, to
knowingly make any false statement, or conceal any material fact on a
refund claim for the smog impact fee that is filed with the
department.  A violation of this provision is punishable under
Section 72 of the Penal Code.  Any signed claim form submitted to the
department for a refund of the smog impact fee shall be signed under
penalty of perjury.
  SEC. 8.  Section 1673.7 is added to the Vehicle Code, to read:
   1673.7.  (a) The department shall include the following notice
with each check issued as a refund of the smog impact fee:
   "The enclosed check is a refund of the $300 Smog Impact Fee you
paid to the Department of Motor Vehicles when you initially
registered an out-of-state vehicle in California.  In the case of
Jordan v. Department of Motor Vehicles (1999) 75 Cal.App.4th 449, the
court ruled the smog impact fee unconstitutional.  The enclosed
check includes an interest payment which has been calculated from the
date the fee was paid to the date the refund is issued.
   "If you have any questions about the enclosed refund, please
contact your local office of the Department of Motor Vehicles."
   (b) No notice other than the one required under subdivision (a)
may be included with a smog impact fee refund check.
  SEC. 9.  There is hereby appropriated to the Department of Motor
Vehicles the sum of ten million nine hundred eighty-four thousand
dollars ($10,984,000) from the General Fund for the administrative
costs of issuing the smog impact fee refunds.  Funds shall be
expended by the Department of Motor Vehicles only for the purposes of
making the refunds required under Section 1673.2 and 1673.4 of the
Vehicle Code.
  SEC. 10.  This act shall become operative only if Senate Bill 215
of the 1999-2000 Regular Session is enacted and  becomes operative.
  SEC. 11.  No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XIII B of the California
Constitution.
  SEC. 12.  This act is an urgency statute necessary for the
immediate preservation of the public peace, health, or safety within
the meaning of Article IV of the Constitution and shall go into
immediate effect.  The facts constituting the necessity are:
   In order to provide, at the earliest possible time, a refund to
the public of the unconstitutionally imposed smog impact fee, it is
necessary that this act take effect immediately.
